Roush III: Missed Opportunity and Unintended Consequences

I posted twice before on the Roush case. Click here and here for the background.

In short, the issue in this case is: When a person who has previously created a patient advocate designation is deemed unable to make their own medical decisions by two doctors, then revokes that patient advocate designation, are that person’s rights to make their own medical care decisions (a) immediately restored or (b) suspended until a court decides whether they can make their own decisions or whether a guardian needs to be appointed to make those decision for them?

By implication, the Court of Appeals, in an unpublished decision, came down on the side of “immediately restored.” The losing party then sought review from the Michigan Supreme Court, which took the matter seriously enough to request that the Elder Law and Disability Rights Section of the State Bar file an amicus brief, which they did; as did other interests including the Michigan Elder Justice Initiative.  This past Friday (May 6), the Michigan Supreme Court denied leave to appeal, leaving the Court of Appeals opinion in place.  For the moment, at least, a win for the “immediately restored” camp.

Michigan’s patient advocate law is curious in that it expressly provides that:

… even if the patient is unable to participate in medical treatment decisions, a patient may revoke a patient advocate designation at any time and in any manner by which he or she is able to communicate an intent to revoke the patient advocate designation. If there is a dispute as to the intent of the patient to revoke the patient advocate designation, the court may make a determination on the patient’s intent to revoke the patient advocate designation. If the revocation is not in writing, an individual who witnesses a revocation of a patient advocate designation shall describe in writing the circumstances of the revocation, must sign the writing, and shall notify, if possible, the patient advocate of the revocation. If the patient’s physician, mental health professional, or health facility has notice of the patient’s revocation of a patient advocate designation, the physician, mental health professional, or health facility shall note the revocation in the patient’s records and bedside chart and shall notify the patient advocate. MCL 700.5510(d)

It seems the Michigan Supreme Court would have done us all a favor by taking the case and clarifying the law on this point. Now the issue of when that revocation occurs, and what the responsibilities of the various parties are, remains illusive.  All we have is an implication, based on an unreported case that arose in the context of a motion for summary disposition.

I wonder about how institutions may react, and whether there will be unintended consequences of the Supreme Court’s decision to take a pass.

For instance, what if I run a facility that cares for persons with cognitive impairments, and one of my residents has been deemed unable to make their own medical treatment decisions, and that resident has been admitted to my facility by their patient advocate, and then what if that resident says “I want to go home”? Is that expression alone a revocation of the patient advocate designation triggering the patient’s right to leave? Or does the person have to actually say the magic words “I revoke my patient advocate designation?” Is “I want to go home” enough to trigger the obligation of the staff person to report the incident as contemplated by statute? Enough to require a hearing so that a “court may make a determination on the patient’s intent to revoke the patient advocate designation.”

If I am the facility facing the possibility of a false imprisonment lawsuit (which is how the Roush case started), I might want to act out of an abundance of caution. I might want to make sure no family member later testifies in a lawsuit against me that: “My mother told the staff she wanted to go home, and they kept her against her will.  I heard her say it in front of the staff several times.”

So, do facilities start demanding guardianships over all their impaired residents again, rolling back twenty years of progress? Do plaintiff’s attorneys start looking for these cases? Maybe I am thinking too much, which I admit I can do sometimes. But with family dynamics the way they are, and with care facilities in a defensive posture, as they are, I’m not sure.

So, in any event, to my way of thinking, by deciding not to take this important case, the Michigan Supreme Court missed an opportunity to help clarify this confusing area, and provide some direction the both the families and facilities that are trying to care for our loved ones.

Read More

Roush II: The Plot Thickens

A little drama is stewing in the elder law world.

I wrote about the Roush case when it came out. Click here to read that post appropriately titled “This Could Get Interesting.”

Since then, the matter has been taken up by the Michigan Supreme Court. And the MSC requested that the Elder Law Section of the State Bar file a brief setting forth what they believe the correct result should be.  That was done.

Awkward. Now some of the very same Section Council members who voted for the brief to be submitted (or at least chose not to vote against it as it was unanimously approved), are wondering if they made a mistake – as other advocates in the aging community are suggesting that the position taken in the Section’s brief interprets the controlling law in a way that is less than stridently protective of individual rights.

No Man’s Land. The issue  – and it’s an important one – comes about because Michigan’s patient advocate designation (“PAD”) law has long been recognized as unique (surprising even) in its express direction that a person can revoke their PAD even if they lack capacity to make their own medical decisions.  That is, even after two doctors have triggered the patient advocate’s authority by certifying that the patient lacks the ability to understand the implications of their own medical treatment decisions, that patient may nonetheless revoke the authority of the patient advocate.  The question in Roush is:  So what then?  What happens during the period after a person who has been deemed unable to make their own decisions revokes the PAD – and before a Court can appoint a guardian (or at least decide if one is needed)?  Is the person to be given all their natural rights to accept or reject medical care, as any competent person would have?  Or are their rights frozen until a Court decides who is in charge – themselves or someone else?  What’s a hospital (or in this case, nursing home) to do?

Many advocates would say the rights of that individual are restored in full. But the Elder Law Section’s position, as argued in the brief, is that those rights are not restored until a Court says so.

The Section’s brief was prepared by our very capable colleague Jim Steward and his colleague Angela Hentkowski (a very excellent lawyer in her own right). Click here to read the brief.

Oral arguments are scheduled for March.

Read More

Bittner’s Bite

So we have a new published opinion on a probate court case – something unusual these days.  In Re Conservatorship of Shirley Bittner was published September 8, 2015.  Click here to read the case.

In Bittner, the probate court imposed a conservatorship over the vulnerable adult, and did so over what the Court of Appeals calls her “strenuous objections.”

The subject of the petition was Shirley Bittner.  The petition was brought by her daughter Suzanne.  Shirley was a 74 year-old widow.

Suzanne had been granted power of attorney over Shirley by Shirley, and had been made co-trustee of Shirley’s trust; that is until Shirley concluded that Suzanne had misused those powers for her own benefit.  At that time Shirley petitioned the Court to recover the property she believed had been misappropriated by Suzanne.  Suzanne countered with a Petition to have a third party (public fiduciary) appointed as Shirley’s conservator.  Meanwhile Shirley appointed a second daughter, Stacey, as her agent under a new power of attorney.

The probate court took evidence and appointed Stacey (the new agent under power of attorney) as conservator.

Appointment of a conservator is a two-prong test.

1. Is the person unable to make their own decisions (are they sufficiently impaired to invoke the Court’s jurisdiction to take away their rights)?; and

2. If the Court does not act, will this person’s resources be mismanaged?

Both prongs must be met to impose a conservatorship over an adult.

The Court of Appeals reviewed the decision of the trial court and reversed.

As to the first prong, the Court of Appeals found that the evidence was marginal.  Shirley clearly had some impairments, but it was not so clear that those impairments rose to the level necessary to impose a conservatorship over her.

As to the second prong, the Court of Appeals found no evidence that anything was being mismanaged, at least now that Stacey was acting has power of attorney.

The case is important, as it fires a shot across the bow of the trial courts that are routinely imposing conservatorships over older adults.  And importantly, by analogy, the case will serve the same purpose with respect to the imposition of guardianships.

But nothing is simple in terms of this area of the law.  As to the law, there is no question that the Court of Appeals is right on.  No doubt courts are way too quick to impose guardianships and conservatorships without sufficient legal basis.  That said, it is also true that there is a great deal of mischief in the world of vulnerable adults.  Once one child is taking advantage of mom, one wonders whether the next child is likely to do so and/or whether in time mom will be persuaded to create yet another power of attorney appointing the daughter who allegedly misappropriated assets, or yet another child who may or may not be acting in mom’s best interests.  Mom is vulnerable – that’s the point.  So, left unchecked, these cases can go on and on.  Where there is money and family dysfunction, there is a high likelihood of further issues.  I would suggests that there is something to be said for probate judges who have seen enough of these cases to want to simply grab control, create a conservatorship, and thereby put themselves in the position of monitoring what goes on in the future; and by doing so, shut the door to future mischief.

Accordingly, I appreciate the Court of Appeals upholding the rules.  I greatly respect my many colleagues who recognize that taking away the rights of an adult should only be done as a last resort.  But I worry about law that makes trial judges less willing to step in and grab control when it is clear that the mayhem has begun.

Read More

More Thoughts On Our New Durable Power of Attorney Law

In an earlier post I reported on changes to MCL 700.5501 brought about by Public Act 141 of 2012.  In this post I would like to point out some other intriguing aspects of this law.  A link to the law may be found at in that earlier post of June 12, 2012.

Planners need to be mindful of how these new developments impact planning options by a principal who later becomes incompetent, and the extent to which the documents created may limit the planning tools available to the agent, and the exposure of the agent to liability.

First, and most importantly, section 3(d) provides:

“The attorney-in-fact shall not make a gift of all or any part of the principal’s assets, unless provided for in the durable power of attorney or by judicial order.”

This section addresses one of most difficult issues of FPOA drafting, whether, and to what extent, to authorize an agent to make gifts.  Heretofore the law on this issue was vague. MCL 700.2114 can be extrapolated to mean that an agent may not gift to themselves without express authority, but this new law goes much further, and becomes much more of an obstacle to things like Medicaid planning by an agent.

Commonly, form FPOAs used by too many practitioners will include no expression on gifting, or will include a provision that limits gifting the federal annual exclusion amount.  These documents are likely generated without much discussion or consideration of the important role gifting plays in estate planning, VA benefits planning and Medicaid eligibility planning.  For planners interested in an FPOA that authorizes broad gifting powers, a form of such a document I use is available on the ICLE website forms bank, and as an exhibit in my ICLE book on Medicaid Planning

Where gifting is allowed, it is often best to limit that authority to gifts made in a manner consistent with the principal’s existing estate plan.

That’s not to say that gifting is always a good thing.  For many people, and for many reasons, gifting is not appropriate, and such documents should either remain silent on the issue or expressly preclude gifting by an agent.

Notably, the new law does not address the second leg of this issue, whether an agent can modify a revocable trust created by an incompetent settlor.  One would presume however, that Michigan law would not sanction such actions unless expressly authorized by the document.  Again, see my ICLE form for suggested language.

Another important issue not addressed expressly in the new law is the question: Are transfers from accounts jointly owned between the principal and agent, gifts by the agent?  Presumably if the joint ownership is created by a competent principal, the agent/co-owner’s removal of funds from such an account would not be a violation of the statute because it would not be an act of the agent in their fiduciary capacity.  That is not to say that such action, if taken, and where the agent did not contribute to the account, and/or where the joint ownership was established for convenience purposes, would not be actionable.

Section 2(e of the new law does say however that:

“Unless provided in the durable power of attorney or by judicial order, the attorney-in-fact, while acting as attorney-in-fact, shall not create an account or other asset in joint tenancy between the principal and the attorney-in-fact.”

Also important is section 2(g) of the new law, it provides:

“In the durable power of attorney, the principal may exonerate the attorney-in-fact of any liability to the principal for breach of fiduciary duty except for actions committed by the attorney-in-fact in bad faith or with reckless indifference.”

This section authorizes exculpation of the agent, but with a “bad faith” floor.  The Medicaid planning power of attorney included in my ICLE materials referenced above, provides such exculpation provisions, which planners may want to consider.

Read More

Revised MCL 700.5501 Mandates Acceptance and Other Formalities

The passage of Public Act 141 of 2012 is significant to estate planners in that it requires that an agent appointed under a standard power of attorney for finances (FPOA) to sign an acceptance before acting, and for such documents to be witnessed by two people and notarized.

For planners who have not historically included an acceptance with their financial power of attorneys, they need to start.  For those who have, they need to alter their acceptances to conform to the statutorily required form.  An example of this form can be found at:

http://www.mielderlaw.com/professional-resources

Michigan law has long required acceptances for medical power of attorneys/patient advocate designations and this law does not change that.

The law should not impact the validity of existing FPOA’s that have nonconforming acceptances or no acceptances.  Specifically, MCL 700.5501(7) provides that the new requirements are not applicable to documents created before October 1, 2012. Of course, problems may arise in the future with institutions that refuse to accept documents without acceptances.  Accordingly, best practice may be to provide clients using existing FPOA’s with new acceptances, or otherwise make these acceptances available.

There are exceptions for power of attorneys used in business dealings and other unique situations, also described in MCL 700.5501(7).

The new law will be found in EPIC at 700.5501.  It is immediately effective.

To review the legislation, go to: http://www.legislature.mi.gov/documents/2011-2012/publicact/pdf/2012-PA-0141.pdf

Read More